Yesterday, Hewlett-Packard Company (HPQ) completed the integration of 3PAR Inc. into its Converged Infrastructure portfolio. HP had acquired virtualized storage solutions provider 3PAR in September 2010 at a hefty price of $33 per share, outbidding Dell Inc. (DELL).
HP’s Converged Infrastructure solutions bring together servers, storage and networking products to manage data centers from a common platform. The Converged platform has been designed to make data center handling more simple, flexible, efficient and cost effective. 3PAR’s highly-virtualized storage solutions with advanced data management features (dynamic tiering, thin provisioning, etc.) for cloud-computing environments further strengthen HP’s Converged portfolio.
Leveraging 3PAR’s storage platform, HP introduced new virtualization and deduplication storage solutions that will enable more scalable cloud computing. Customers will now be able to deploy cloud applications within minutes. Moreover, while storage management is expected to show a marked operational improvement, storage costs should be almost half of what it is now.
In today’s technology-driven world, the enterprise storage space is one of the most enviable growth areas. We believe that HP, with its renewed strength, will remain well positioned to capitalize on this market. Apart from this, we remain optimistic about HP’s strong business model, as well as its leadership position in both PC and Server segments. The company is also expected to benefit from an increase in IT spending and PC refresh cycles.
But we should keep in mind that the storage space is drawing in many players, leading to intense competition. 3PAR’s high-end enterprise storage products compete with those from key players in the segment, namely EMC Corp.’s (EMC) Symmetrix, International Business Machines Inc.’s (IBM) XIV and other offerings from Hitachi.
Currently, HP has a Zacks Rank of #3, which translates into a short-term Hold recommendation.
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